Electronic Frontier Foundation Media Release

EFF Defends MusicCity Peer-to-Peer Technology

Tests Hollywood's Control of Content Delivery Technology

Embargoed for Release on: Tuesday, November 6, 2001

Washington, DC - The Electronic Frontier Foundation (EFF)
announced today that it has joined MusicCity's legal
defense team in a crucial case testing the limits of
Hollywood's power to control new technologies.

"This case is about the freedom of technologists to
innovate and the public's right to communicate," said EFF
Senior Intellectual Property Attorney Fred von Lohmann,
slated to announce the EFF's entry into the case at a
12:30 PM Eastern press conference at the O'Reilly
Peer-to-Peer and Web Services Conference, in the Chevy
Chase Room of the Westin Grand Hotel.

29 of the world's largest entertainment companies have
sued MusicCity, the Nashville-based developer of the
leading peer-to-peer file-sharing product Morpheus, in
federal court in Los Angeles. Morpheus is a file-sharing
tool that allows users to connect with each other and share
information of all kinds. The entertainment companies claim
that MusicCity should be held responsible for the alleged
copyright infringements committed by Morpheus users.

"Just as the entertainment industry tried to ban the VCR,
now it aims to outlaw the technology that is the next
killer app of the Internet," said EFF Intellectual Property
Attorney Robin Gross.

In the early 1980s, the motion picture industry tried to
outlaw VCRs by claiming that Sony should be held liable for
the infringing activities of Betamax users. The U.S.
Supreme Court rejected this effort to stifle innovation,
holding that so long as the technology is "capable of
substantial noninfringing uses," vendors can build and sell
it without fear of copyright litigation from entertainment
companies. The lawsuit against MusicCity will likely be
the pivotal test for the Betamax rule in the Internet
context.

"The question is whether Hollywood media powerhouses will
be able to use copyright as a pretext for seizing control
over technology development," said Andrew Bridges, attorney
with the Silicon Valley law firm of Wilson, Sonsini,
Goodrich & Rosati and lead defense counsel for MusicCity.
"The landmark Betamax case taught the world that copyright
ownership does not confer veto power over the development
of technologies with varied uses, so long as those
technologies are capable of substantial non-infringing
uses. In the end, Hollywood learned how to profit from the
new videotape recorder technology."

Peer-to-peer file-sharing technology platforms like
Morpheus are not only capable of noninfringing uses, but
are being used for noninfringing purposes today.

The case, captioned Metro-Goldwyn Mayer v. Grokster,
No. 01-CV-8541 SVW, is before Judge Stephen V. Wilson, U.S.
District Court Judge for the Central District of California
in Los Angeles. Case documents also name as defendants
Consumer Empowerment and Grokster, two companies that
distribute peer-to-peer file-sharing software built on the
same technology as Morpheus. No court dates have been set
in the case.